CMA Petitions Supreme Court To Review 10% Medi-Cal Pay Cut

Medi-Cal is California's Medicaid program (Robeznieks, Modern Healthcare, 9/23).

Background on 10% Cut

In October 2011, CMS approved the state's plan to reduce certain Medi-Cal payments by 10%. The cut will be retroactive to June 1, 2011.

In December 2012, a three-judge panel of the 9th U.S. Circuit Court of Appeals overturned a district court ruling to stop the retroactive 10% cut. Health care providers asked the full 9th Circuit court to review the case. In May, the full circuit court upheld the cut.

Details of Reduction

The cut will start at $917 million for fiscal year 2013-2014 and one year later will increase to $1.4 billion.

H.D. Palmer -- a spokesperson for the California Department of Finance -- noted that payment reductions are up to 10%, rather than a flat 10% cut. He added that if state officials determine that a reduction for a certain provider creates a barrier to care, they have the authority to scale back the cut or withdraw it entirely (California Healthline, 6/6).

Details of Petition

In the filing last week, CMA said that the cut could cause harm to current Medi-Cal beneficiaries, as well as to those who would qualify for the program through an expansion under the Affordable Care Act.

The group argued that:

The new payment rates will be lower than providers' expenses, which would violate federal law; and

CMS did not review practice cost data when it approved the proposed cut (Modern Healthcare, 9/23).

In a release, CMA said, "Federal law requires that Medi-Cal patients have the same access to physicians and other health care providers as the general insured public," adding, "[R]educing California's already dismal Medi-Cal rates will force providers out of the program at a time when millions of new patients will be diverted into the Medi-Cal system under the [ACA]" (CMA release, 9/20).

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